So far, Vantage CU has managed well without access to technical support from Pano Logic. The Pano System for VDI includes software and hardware components, and while the credit union can continue to run the solution's software independently, the physical hardware was owned by Pano Logic and will eventually need to be replaced, Ragaini and Parkinson said. They described the Pano System as a self-service system that they purchased, set up an account with and installed on their own. 

“At some point in time, maybe a few years down the road, we will need to see what other brokers are out there to replace the hardware piece, which is a small part of it,” Parkinson said. “If we were really hard pressed, we'd be able to replace the hardware overnight.”

Before its closure, Pano Logic had raised $45 million and had an investor list that included Foundation Capital, Goldman Sachs and Mayfield Fund, said former spokeswoman Renee Deger. Business officially ended on Oct. 23, 2012, when approximately 50 employees were laid off, she confirmed. 

The company, launched in 2006 by Aly Orady, who served as chief technology officer, and Nils Bunger, who is now CEO and co-founder for Mountain View, Calif.-based mobile document management company Mobile Span Inc., have not offered statements explaining Pano Logic's failure.

What the public does know is that in lieu of filing for bankruptcy, Pano Logic filed an assignment for the benefit of creditors, with Mountain View, Calif.-based business advisory firm Sherwood Partners serving as the company's assignee. An ABC, a popular choice for failed companies in California, is a common law contract between a company's board of directors and an assignee hired to manage paying off the company's creditors, explained James R. Meizanis, an associate bankruptcy lawyer for the Arlington, Va.-based Tully Rinckey, PLLC.

Meizanis said companies typically choose an ABC over a bankruptcy to save time and money as well as gain control during the liquidation process.

“In a bankruptcy, a judge has to approve the sale of the company, and there are extra hurdles that need to be crossed,” Meizanis said. “Under an ABC, the company can pick the assignee.”

Business customers of a company under an ABC are left to fend for themselves, Meizanis said. “A beneficial scenario for the company's customers is for a new company to come in to buy and similarly operate its assets,” he said. 

Due to the self-service nature of its products, Pano Logic's closure may not have led its clients into crisis mode, but the incident surely reminded credit unions to do their homework before going into business with a new technology vendor, especially a start-up. Scott Hodgins, research director for Cornerstone Advisors in Scottsdale, Ariz., who said a vendor disappearance as unexpected as Pano Logic's is very rare, recommended that credit unions take a hard look at a technology vendor's financials before entering a partnership. 

“Sometimes a credit union will want a product so badly that it'll accept financials that don't have enough details in them,” Hodgins said. “It's OK to go back and say, 'We need more details.' If they're not willing to give them to you, that's a huge red flag. With a start-up vendor, don't expect to see a profit, but you do want to see revenue going up. You can even ask one of your commercial lenders to look at the vendor and tell you if they'd make a loan for them.”

Depending on how mission-critical its product is, the sudden death of a vendor can cause anything from a catastrophe to a mild inconvenience for credit union clients, Hodgins said. In the case of a vanishing technology vendor, Hodgins suggests credit unions talk to their regulators about alternative products and reach out to the vendor's other former credit union clients. He also said it's a good idea for credit unions to obtain a vendor's software codes so they have the option of hiring someone to run it for them.

“Usually, you're talking about getting temporary support until someone else buys and runs it,” he said. “Depending on the product, it can kill you in a week, or it can be a nonissue.”

Vantage CU stressed it had no doubts about Pano Logic when the credit union originally researched the company.

“Pano Logic is worldwide, in hospitals and in many credit unions,” Ragaini said. “They weren't a fly-by-night company. Their technology is so good that I believe someone else will pick it up.”

Ragaini and Parkinson said they have been in contact with other former Pano Logic credit union clients and would like to see the company's client base come together to develop their own solution that perpetuates what Pano Logic offered. If that isn't feasible, they'd like to see the group find a new vendor to step into the failed company's shoes, they said.  

“I'm surprised that someone in the industry hasn't stepped up to the plate to get all these Pano people together,” Ragaini said. “What we want to do is raise awareness about the situation, and find out why other vendors are not seizing the opportunity to step in and provide low-cost transition alternatives.”